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Mexico : in-firm training for the knowledge economy

Author

Listed:
  • Hong Tan
  • Lopez-Acevedo, Gladys

Abstract

The authors use panel firm-level data to study in-firm training in Mexican manufacturing in the 1990s, its determinants, and effects on productivity and wages. Over this decade, not only did the incidence of employer-provided training become more widespread among manufacturing enterprises, but a higher proportion of the workforce received training within firms. Technological change, as proxied by research and development (R&D), was an important driver of these training trends. It contributed to increased training over time through a rising share of firms doing R&D, but more important, through a greater propensity over time to train conditional on conducting R&D. The authors investigate the productivity and wage effects of training in several ways: 1) Estimating the wage and productivity effects of training treated as endogenous. 2) Using training event histories to examine the impact of changing training status over time. 3) Looking at how training (and technology) practices changed where firms were located in productivity and wage distributions over the 1990s. Together, these cross-sectional and panel analyses found evidence that training had large and statistically significant wage and productivity outcomes, that joint training and R&D yielded larger returns than investments in just one or the other, and that both training and technology investments enabled firms to improve their relative position in the wage and productivity distribution between 1993 and 1999.

Suggested Citation

  • Hong Tan & Lopez-Acevedo, Gladys, 2003. "Mexico : in-firm training for the knowledge economy," Policy Research Working Paper Series 2957, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2957
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tan, Hong & Savchenko, Yevgeniya & Gimpelson, Vladimir & Kapeliushnikov, Rostislav & Lukiyanova, Anna, 2007. "Skills Shortages and Training in Russian Enterprises," IZA Discussion Papers 2751, Institute for the Study of Labor (IZA).
    2. Arias, Omar & Blom, Andreas & Bosch, Mariano & Cunningham, Wendy & Fiszbein, Ariel & Lopez Acevedo, Gladys & Maloney, William & Saavedra, Jaime & Sanchez-Paramo, Carolina & Santamaria, Mauricio & Siga, 2005. "Pending issues in protection, productivity growth, and poverty reduction," Policy Research Working Paper Series 3799, The World Bank.
    3. Rita Almeida & Marta Faria, 2014. "The wage returns to on-the-job training: evidence from matched employer-employee data," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-33, December.
    4. Almeida, Rita & Aterido, Reyes, 2008. "The incentives to invest in job training : do strict labor codes influence this decision?," Social Protection and Labor Policy and Technical Notes 46189, The World Bank.
    5. Almeida, Rita K. & Aterido, Reyes, 2010. "The Investment in Job Training: Why Are SMEs Lagging So Much Behind?," IZA Discussion Papers 4981, Institute for the Study of Labor (IZA).
    6. Caudillo Sanchez, Francisco, 2006. "Is information and communication technology (ICT) the right strategy for growth in Mexico?," Freiberg Working Papers 2006,17, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    7. Blunch, Niels-Hugo & Castro, Paula, 2005. "Multinational enterprises and training revisited: do international standards matter?," Social Protection and Labor Policy and Technical Notes 32546, The World Bank.
    8. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
    9. Souag, Ali & Assaad, Ragui, 2017. "The Impact of the Action Plan for Promoting Employment and Combating Unemployment on Employment Informality in Algeria," IZA Discussion Papers 10966, Institute for the Study of Labor (IZA).
    10. Fernandes, Ana M., 2008. "Firm Productivity in Bangladesh Manufacturing Industries," World Development, Elsevier, vol. 36(10), pages 1725-1744, October.
    11. Zubovic, Jovan, 2010. "Razvoj privrede zasnovan na ulaganjima u ljudske resurse i stranim investicijama
      [Economic Growth Based on Investments in Human Resources and Foreign Investments]
      ," MPRA Paper 64092, University Library of Munich, Germany.
    12. Rita Almeida & Reyes Aterido, 2015. "Investing in formal on-the-job training: are SMEs lagging much behind?," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-23, December.
    13. Monojit Chatterji & Catia Montagna, 2004. "Foreign Direct Investment, Training and Absorptive Capacity," Dundee Discussion Papers in Economics 176, Economic Studies, University of Dundee.
    14. Almeida, Rita K. & Aterido, Reyes, 2010. "Investment in job training : why are SMES lagging so much behind ?," Policy Research Working Paper Series 5358, The World Bank.
    15. Kathuria, Vinish & Seethamma Natarajan, Rajesh Raj & Sen, Kunal, 2010. "State business relations and manufacturing productivity growth in India," MPRA Paper 20314, University Library of Munich, Germany.
    16. World Bank, 2013. "Labor Markets for Inclusive Growth," World Bank Other Operational Studies 16579, The World Bank.
    17. Montes-Rojas, Gabriel & Santamaria, Mauricio, 2007. "Sources of productivity growth: Evidence from the Mexican manufacturing sector," The North American Journal of Economics and Finance, Elsevier, vol. 18(3), pages 263-278, December.
    18. Michelle Riboud & Yevgeniya Savchenko & Hong Tan, 2007. "The Knowledge Economy and Education and Training in South Asia," World Bank Other Operational Studies 19637, The World Bank.
    19. Ali Souag & Ragui Assaad, 2017. "The Impact of the Action Plan For Promoting Employment and Combating Unemployment on Employment Informality in Algeria," Working Papers 1161, Economic Research Forum, revised 12 Jun 2017.

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